Landing gear manufacturer to be acquired by PE firm

Héroux-Devtek, the landing gear manufacturer, has entered into an arrangement agreement with an affiliate of US-based private equity firm Platinum Equity Advisors (Platinum Equity). The terms of the deal value the acquisition by Platinum Equity at approximately $1.35bn. The PE firm will acquire all the issued and outstanding common shares of Héroux-Devtek for $32.50 in cash per share. Common shares owned by members of senior management, including Gilles Labbé, executive chairman of the board, and Martin Brassard, president and chief executive officer, will be rolled over for an amount per share equal to the consideration received by the corporation's shareholders. The cash per share price represents a 28% premium to the closing share price on July 10, 2024 and a 47% premium to the 90-day volume weighted average trading price per share on the Toronto Stock Exchange for the period ending on July 10, 2024. The agreement is the result of a review of strategic alternatives led by a Special Committee comprised of independent directors of Héroux-Devtek. ""After an extensive and robust strategic review process, we are pleased to have agreed on the terms of a transaction with Platinum Equity that has the full support of Héroux-Devtek's Board of Directors,"" said Louis Morin, chairman of the Special Committee. ""After careful deliberation, the Special Committee and the board of directors have unanimously concluded that the transaction is in the best interests of the corporation and its stakeholders."" ""We have admired Héroux-Devtek's growth for many years and have great respect for the business Gilles and his team have built,"" said Louis Samson, co-president of Platinum Equity. ""We believe the company's engineering prowess and emphasis on R&D have contributed to its success as a service-oriented supplier that delivers for its customers. Platinum Equity values Héroux-Devtek's commitment to customer service excellence and we are excited to partner with the company's management team in the next phase of its growth journey."" Platinum Equity managing director Delara Zarrabi commented: ""We believe the company has an opportunity to make an even larger impact on a global stage and we will deploy our financial and operational resources to help the company grow organically and through strategic acquisitions."" In connection with the proposed acquisition and pursuant to discussions with Caisse de dépôt et placement du Québec (CDPQ), Platinum Equity said Héroux-Devtek will maintain and invest in its headquarters and other operations in Québec, including its manufacturing operations. ""CDPQ has contributed to Héroux-Devtek's expansion and development since 1987, enabling it to become a global champion in its industry today. Following nearly 40 years of support, it was imperative that the company continue to grow while remaining anchored in Québec. With Platinum Equity's strong commitments to activities in Québec, CDPQ supports this transaction,"" said Kim Thomassin, executive vice-president and head of Québec at CDPQ. ""We want to underscore the leadership and entrepreneurial vision of Gilles Labbé and his teams who have contributed to the success of this leading aeronautics company."" National Bank Financial and Scotiabank act as financial advisors to Héroux-Devtek and the Special Committee; Desjardins Capital Markets, retained to provide independent financial advisory services to the Special Committee, provided a fairness opinion and an independent formal valuation of the common shares. Fasken Martineau DuMoulin and Hogan Lovells are acting as legal advisors to Héroux-Devtek and to the Special Committee, and Stikeman Elliott and Latham & Watkins are acting as legal advisors to Platinum Equity. BMO Capital Markets is acting as financial advisor to Platinum Equity and as the lead arranger for the financing. The transaction will be implemented by way of a plan of arrangement under the Business Corporations Act (Québec) and is expected to close before the end of the Corporation's current fiscal year ending March 31, 2025, subject to customary closing conditions and regulatory approvals. The transaction is not subject to any financing condition.